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having a small install base would mean that stores wouldn't give much shelf space to 360 games. this would mean that there would be a very limited selection of games. limited selection of games would deter would be buyers of the 360 as they wont have much to choose from. and around and around we go.

this is why it is important for a game console to have a large install base. the larger the install base, the larger the potential customers of software, the larger the shelf space allocation and the larger the possibility of increasing hw sales. and around and around it goes